The British pound has been reaching significant resistance lines against a number of its primary currency rivals. A chance exists that the pound could see some downward retracement over the next several days as investors test the strength of these levels.
As an example, the GBP/CHF, shown on the chart below, has some revealing indicators regarding this development.
As you can see, the pair touched the long-term trend line at 1.5500 and quickly bounced off.
Now we are beginning to see the technical pressure building against any additional bullishness for this pair, symbolized by the technical oscillators on the lower portion of the chart.
The Stochastic (slow) shows a very fresh bearish cross, suggesting heavy sell pressure and what appears to be an impending downward movement that could be sustained for the next few days, even weeks.
The MACD/OsMA also shows a bearish cross, but the upward movement of the oscillator seems to be giving off mixed signals. The wide divergence on this oscillator, however, does support the downward notion.
If correct, the GBP/CHF could see some bearishness over the next few days, with targets at 1.5200 and 1.4900.
GBP/CHF – Daily Chart
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Greg Holden is the Chief Market Analyst at ForexYard. Greg uses his detailed knowledge of fundamental and technical analysis to provide some of the leading market forecasts in the forex world today. A guest lecturer at forex symposiums and Chief Editor of ForexYard's analysis center, Greg brings highly detailed and easy-to-use market analyses to his clientele. He has been published on ForexYard's Trading Blog and affiliate websites. Greg holds degrees in Political Science and Economics from Missouri State University, as well as a Masters degree in Middle Eastern History.
